CANBERRA OBSERVED: Both government and opposition facing moment of truth

by national correspondent

News Weekly, May 11, 2013

The 2013 federal Budget is likely to go down as one of the more memorable budgets in the last couple of decades.

It will definitely be Treasurer Wayne’s Swan’s last budget, and close to certainly the Gillard Government’s last budget. It will be an historic marker of the end of the long mining boom, and many of its key measures may never be implemented.

The budgets of governments hurtling toward oblivion are always fascinating.

The Victorian state Labor government of Premier Joan Kirner (Julia Gillard’s mentor and political godmother) delivered a budget of pure fantasy as it was preparing for the wrath of Victorians in 1992. It was all good news despite the state being in dire economic circumstances.

In 1975, federal Labor Treasurer Bill Hayden delivered a responsible and plausible budget after the improvidence of the Whitlam Government until that time.

Labor is hoping that this will be its legacy budget, a symbol of the party’s enduring record of delivering health and welfare reforms to better the lives of ordinary Australians: superannuation (Hawke/Keating), Medibank/Medicare (Whitlam/Hayden/Hawke), pharmaceutical benefits (Chifley).

Yet the party is trying to achieve this at exactly the wrong time — after having squandered tens of billions when the government coffers were overflowing courtesy of the mining boom.

The debacle is symptomatic of the central failure of the Gillard Government — incompetence and the absence of a fundamental purpose in the delivery and selling of its policies.

Its failures on border control, budget control, welfare control, implementation of new taxes, on the rolling out of the National Broadband Network (NBN), and on the hooking up of Australia to a European carbon-trading system are all coming home to roost.

And now there is to be a spectacular dive into the bottomless money pit for the proposed National Disability Insurance Scheme (NDIS) and for the Gonski school funding proposals where none will be worse off.

Tax revenue this year is expected to be $340 billion — down $15 billion on Treasury’s projections, but overall up by a healthy 8 per cent over the previous year.

Mr Swan has badly overestimated government revenue — banking on a never-ending boom, but blaming a collapse in tax revenues for his shattered budget.

This is from a government that pledged a hundred times that it would balance the budget this year.

But the Opposition is also facing its moment of truth.

It seems Tony Abbott is prepared to ditch or at least postpone the pet project he took the last election — the $3 billion parental leave scheme.

Always more generous than Labor’s, had it been anyone other than Tony Abbott promising it, the unions would have cheered it on.

But it was to be funded by a tax rise for larger companies and designed to pay women, earning up to $150,000 a year, their full wages for six months.

Not surprisingly, the defenders of stay-at-home mothers were not so enamoured of the Abbott scheme.

Australia is a wealthy nation, but paying a career woman mum earning $150,000 to stay at home on full pay is extraordinary.

But this may be just the start.

Shadow Treasurer Joe Hockey frets daily about his leader’s promises and commitments. He knows that bringing the Budget back to surplus will take years and involve countless fights with vested interest groups.

In the meantime, the Gillard Government has seized on the opportunity of spending money on the abortion drug RU486.

It has flagged that it wants to put RU486 on the Pharmaceutical Benefits Scheme, with Health Minister Tanya Plibersek keen to push the issue hard in the lead-up to the election.

As former press gallery journalist and now academic, Michelle Grattan, recently wrote: “Labor has been anxious to sharpen the abortion issue in the election run-up and now has a way of doing so.”

Writing in The Conversation (April 28, 2013), Grattan said Plibersek will be using the issue to spotlight Abbott’s “record on abortion” and to try to cast doubt on his assertions that he would not use office to pursue his anti-abortion beliefs.

“The timing of the advice for the PBS listing is coincidental, but the latest iteration of the RU486 saga is perfectly tailored for Labor’s ‘misogyny’ narrative about the Opposition leader,” Grattan wrote.

The Government will be more than willing to lock in hundreds of millions of dollars for RU486 to skewer Tony Abbott.

It is doubtful whether even this ploy will work, but it does reveal where the government’s real priorities lie.